Correlation Between Icon Financial and Technology Ultrasector
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Technology Ultrasector at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Icon Financial and Technology Ultrasector into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Financial Fund and Technology Ultrasector Profund, you can compare the effects of market volatilities on Icon Financial and Technology Ultrasector and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Icon Financial with a short position of Technology Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Technology Ultrasector.
Diversification Opportunities for Icon Financial and Technology Ultrasector
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icon and Technology is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Technology Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Ultrasector and Icon Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Icon Financial Fund are associated (or correlated) with Technology Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Ultrasector has no effect on the direction of Icon Financial i.e., Icon Financial and Technology Ultrasector go up and down completely randomly.
Pair Corralation between Icon Financial and Technology Ultrasector
Assuming the 90 days horizon Icon Financial Fund is expected to generate 0.32 times more return on investment than Technology Ultrasector. However, Icon Financial Fund is 3.15 times less risky than Technology Ultrasector. It trades about -0.26 of its potential returns per unit of risk. Technology Ultrasector Profund is currently generating about -0.2 per unit of risk. If you would invest 980.00 in Icon Financial Fund on October 14, 2024 and sell it today you would lose (47.00) from holding Icon Financial Fund or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Technology Ultrasector Profund
Performance |
| Timeline |
| Icon Financial |
| Technology Ultrasector |
Icon Financial and Technology Ultrasector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Technology Ultrasector
The main advantage of trading using opposite Icon Financial and Technology Ultrasector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Technology Ultrasector can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Technology Ultrasector will offset losses from the drop in Technology Ultrasector's long position.| Icon Financial vs. Gabelli Global Financial | Icon Financial vs. Mesirow Financial Small | Icon Financial vs. Blackrock Financial Institutions | Icon Financial vs. Financial Industries Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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